Wells Fargo could reduce deposits

October 22, 2008

Wells Fargo & Co., the California bank that's acquiring Wachovia Corp., agreed to reduce its customer deposits to comply with U.S. bank-merger law should the combined company have more than 10 percent of deposits nationwide, the Federal Reserve said.

Wells Fargo and Wachovia would have controlled about 10.1 percent of deposits as of June 30, the central bank said in a statement Tuesday. Preliminary data indicate that the combined company would hold less than 10 percent as of Sept. 30, the Fed said. The final data won't be available until next month.

The central bank and other regulators expedited clearance of the Wachovia takeover amid the worst financial turmoil since the 1930s.

Wells Fargo, based in San Francisco, made a commitment to "reduce its deposits by any amount that exceeds the nationwide deposit cap" by Dec. 31, based on data as of Sept. 30, according to the Fed statement.